Ferries vs. CitiBikes: Thinking about city subsidies

As the Year of the Ferry draws to a close, New Yorkers with ready access to the waterfront are in for a treat. As a parting gift, Mayor Bloomberg announced today that the city will extend its annual subsidy for ferry service for an additional five years through 2019. While weekend fares will go up to $6 per ride, the city will continue its $3 million annual subsidy, and boats will continue to ply the East River.

“The East River Ferry has been a huge success and demonstrates the demand for efficient, affordable transit to points along the City’s waterfront,” Michael Bloomberg said. “We now can promise commuters and visitors access to these waterfront neighborhoods via ferry for the next five years, sustaining an essential part of our Administration’s transportation vision and spurring economic growth across the City.”

According to a release by the mayor’s office, the ferries have been a success with three million passengers since a June 2011. The ridership has far surpassed initial estimates, and critics of the program — including me — have come around a bit. As the city notes, the ferries have “become an integral part of the city’s transportation infrastructure, improving transit connections between emerging waterfront neighborhoods in Brooklyn and Queens, enhancing mobility in New York Harbor for residents and visitors, increasing flexibility for emergency transportation services, and supporting the ongoing reactivation of much of the East River waterfront.”

Now I’m happy to admit that I was wrong on the ferries. I didn’t think the effort was succeed, and I thought the city was wasting taxpayer dollars on something that had tried and failed. But due to the changing demographics of New York, the time is ripe for waterfront ferry service, and people who live in luxury buildings near the DUMBO, Williamsburg and Long Island City waterfronts, as well as though coming from Red Hook, have flocked to the service.

That’s all well and good, but I still think the spending priorities here a bit skewed. The ferries serve a small subset of New Yorkers and aren’t part of a network that can expand much beyond developed areas the waterfront. On the flip side of this coin is another new “last-mile” transportation system that relies on network effects to expand and could reach every single surface street in New York City for much less than the monthly bulk discounts
offered by the ferry. I am, of course, talking about CitiBike, New York’s bikeshare system.

Currently, CitiBike is supported by a $40 million grant from CitiBank that covers five years of service, and the city hasn’t forked over taxpayer dollars beyond some marginal monies. Why? A $3 million annual investment in CitiBike would allow for an increased reach and capacity by nearly 40 percent, and CitiBike needs that network effect to grow. If New York City has a limited pool of money from which it can support transportation, is this focus on ferries that serve neighborhoods that are generally well-off and well-connected neighborhoods off the mark?

12 Responses to “Ferries vs. CitiBikes: Thinking about city subsidies”

And what about the potential synergy between those two programs? One of the biggest problems with the ferries is that there isn’t much nearby the waterfront, but bicycles could be a good way for a decent number of passengers to get from the ferry terminal to their destination, or at least the closest subway station.

A $3 million subsidy to run ferry service? Sounds reasonable to me. The ferry schedules and areas served are decent enough for that level of subsidy. Maybe we can convince them to hit Governor’s Island year-round and head to Staten Island as well…

There should be zero city subsidy of Citibike in its current incarnation. That the city accepted a sponsor contribution of only $9 million a year combined from Citi and MasterCard is absurd. Compare CEMUSA’s bus shelter/newsstand contract: $1.4 billion in cash and services provided to the city over 20 years for $70 million a year.

Now, the value of the advertising space on bikes compared to those on bus shelters can be debated, but without a doubt the bikes and bike stations are used and located in prime eyeball locations. Plus, it’s human nature to look at a flying blue ad as it moves by on the street.

If $3 million in taxpayer money could eliminate the need for private grants and maintain or expand NYC BikeShare’s current level of service, I’d be all for it. Otherwise, I hope that the city negotiates a more favorable contract for New Yorkers 4 years from now, both for their eyeballs and their wallets.

I think Citibank had to calculate the risk/reward of sponsoring Citibike. Given the crazy media climate around bicycles in NYC two years ago, Citibank could have had a lot of negative attention. And if not for Ed Skylar, the former Bloomberg assistant in City Hall, I doubt Citibank would have stepped up.

And as for the branding, I’m a bit concerned with Barclay’s decision in London to stop sponsoring bikeshare there. Why would they do this if the sponsorship is so valuable as you say?

Agreed. Citibike could very well have been a failure, and gained Citibike/Mastercard nothing. Additionally, if there were a significant number of deaths on citibikes, it would have been a PR negative.
The money did not seem inappropriate at a time where there was a lot of uncertainty about the program.

Citibike should be able to get more money in the next round, since it has passed its initial tests with flying colors.

The ferry service has most certainly not been a success. It carries 3,000 passengers a day. That’s a drop in the bucket compared to the subway’s millions of passengers a day, and even compared to Citi Bike’s tens of thousands per day. I doubt there’s even a single NYCT bus line with such low ridership.